House Financial Services Chairman Hensarling Asks Office of Special Counsel to Investigate CFPB’s Cordray for Violation of Hatch Act

3 Aug 2017

The chairman of the House Financial Services Committee has asked the Office of Special Counsel to investigate Richard Cordray, director of the Consumer Financial Protection Bureau (CFPB), for potential violation of the Hatch Act, which prohibits federal bureaucrats from engaging in political activity.

Rep. Jeb Hensarling (R-TX) sent a letter last week to Acting Special Counsel Adam Miles requesting “that you review whether Director Cordray engaged in prohibited political activities and act on the basis of your findings.”

The Office of Special Counsel has the statutory authority to enforce the Hatch Act.

“On July 19, 2017, several news reports were published regarding speculation that Richard Cordray, the Director of the Bureau of Consumer Financial Protection, will leave the agency to run for partisan political office (the 2018 Ohio Gubernatorial election),” Hensarling wrote:

These news reports quoted William “Bill” O’Neill, a Justice of the Supreme Court of Ohio, and the only Democrat holding state-wide elected office, who said in a recorded interview:

“I was contacted by a mutual friend with Richard Cordray last week and they wanted to be very clear on whether or not my original commitment was still valid. And that was that if Richard Cordray is in the race for governor I am out of the race for governor.”

Justice O’ Neill is also reported to have said that this mutual friend “openly stated” that Director Cordray is going to enter the 2018 Democratic gubernatorial primary, and that “[t]he person I was talking to last week was saying that [Cordray] is basically trying to get as many projects done in Washington as he can before he they left me with the clear impression that he is leaving.”

Hensarling noted, “it is unclear whether Director Cordray consented to or acquiesced in the contact between the unidentified ‘mutual friend’ and Justice O’Neill.”

“However,” he wrote, “if this occurred, it appears that Director Cordray indirectly contacted a potential primary rival to secure the rival?s commitment not to run for office, which may be reasonably construed as evidence that he undertook a campaign to secure a nomination for partisan political office in contravention of the law.”

It has long been speculated that Cordray intends to run for the Democratic nomination for governor of Ohio in 2018. Politically ambitious, has been a key player in Ohio’s Democratic Party since the 1980s

Cordray served one term in the Ohio House of Representatives from 1990 to 1992.

He was the Democratic nominee for Ohio Attorney General in 1998, but was soundly defeated. In 2000 he finished in third place in the Democratic primary for the U.S. Senate.

In 2002, he was elected Treasurer of Franklin County, Ohio, and in 2006 he was elected Ohio Treasurer. In 2008 he was elected Ohio Attorney General, but in 2010 Republican Mike DeWine defeated him in his bid for re-election.

He was appointed acting director of the CFPB by President Obama in 2012, and confirmed as the CFPB’s first director in 2013.

The Office of Special Counsel has not yet responded to Hensarling, and has offered no comment.

“OSC has no comment on the letter you mention,” a spokesperson for the Office of Special Counsel told Breitbart News when asked about the status of Hensarling’s request.

“While we would not comment on a specific matter, on background and generally, we can help with some of your process questions,” the spokesperson said.

“When a complaint is filed with OSC, we open a file and, if warranted, initiate an investigation. At the conclusion of any investigation, OSC would make a determination whether a Hatch Act violation occurred. Investigation time-frames vary depending on the complexity and scope of the case,” the spokesperson concluded.

In his July 28 letter, Hensarling did not set a deadline for OSC to respond.

The letter to the Office of Special Counsel is notable, since Chairman Hensarling has called for Cordray to be fired on a number of occasions.

At a hearing of the House Financial Services Committee in April where Cordray testified, Hensarling made the case for Cordray’s immediate removal as director of CFPB, after noting that “there have been many press reports saying that you would have otherwise returned to Ohio to pursue a gubernatorial bid. Perhaps the rumors of your political aspirations are greatly exaggerated.”

What is clear, though, is that under Mr. Cordray’s leadership the CFPB has shown an utter disregard for protecting markets and has made credit more expensive and less available in many instances; this is particularly true for low and moderate income Americans. What is also clear is that under Mr. Cordray’s leadership, the CFPB has acted unlawfully, routinely denied market participants due process and abused its powers.

The CFPB has now finalized a rule that would reduce access to pre-paid card products, harming nearly 70 million consumers who do not or cannot use traditional banking services. Thanks in part to CFPB’s oversight, credit card rates have risen significantly with many would-be borrowers being priced out of the market entirely. Many credit-worthy borrowers could pay almost $600 more for their auto loans due to CFPB’s indirect auto lending guidance.

According to researchers at the University of Maryland, as a result of Dodd-Frank and the CFPB, middle-income borrowers not only “didn’t obtain cheaper mortgages, but were cut out of the mortgage market altogether.”

For all the harm inflicted upon consumers, Richard Cordray should be dismissed by the President.

“Today, Mr. Cordray and his CFPB don’t just act as a cop on the beat, they act as legislator, prosecutor, judge and jury all rolled into one,” Hensarling said.

“The CFPB represents the summit of unelected, unaccountable and unconstitutional agency government. It represents a dagger aimed at the heart of our foundational principles, namely co-equal branches of government, checks and balances, due process and justice for all,” Hensarling concluded in his opening statement at the April hearing.

As a member of Congress, and chairman of an influential House committee, Hensarling does not have specific statutory authority to to pursue Hatch Act violation investigations. He can, however, draw those potential violations to the attention of the Office of Special Counsel, which does have the statutory authority.

As you know, the Hatch Act states that a federal employee may not “run for the nomination or as a candidate for election to a partisan political office.”

In a June 17, 2009 advisory opinion, the US. Office of Special Counsel (OSC) advised that the Hatch Act’s prohibition against candidacy “extends not merely to the formal announcement of candidacy but also to the preliminaries leading to such announcement and to canvassing or soliciting support or doing or permitting to be done any act in furtherance of candidacy.”

OSC also advised: “Because the Hatch Act has been interpreted to prohibit preliminary activities regarding candidacy, any action that can reasonably be construed as evidence that an individual is seeking support for or undertaking an initial ‘campaign’ to secure a nomination or election to office would be viewed as candidacy for purposes of the Hatch Act.” The OSC further advised that “giving consent to or acquiescing in such activities by others on the employee’s behalf” would similarly Violate the law.

Breitbart News asked Cordray and CFPB for comment on Chairman Hensarling’s letter, and on Cordray’s future political ambitions, but did not receive a response.

If, as most political observers expect will be the case, Cordray decides to run for the Democratic nomination for governor in Ohio, the political timetable to be competitive in the 2018 primary and November 2018 general election means he will probably need to leave his position as director of the CFPB before the end of September.

Cordray apparently wants to stay on as long as possible in order to ram through at least one more regulation.

Hensarling’s letter serves to add pressure on Cordray to leave his current job to try and win the political job of governor in Ohio sooner, rather than later.